Question 2. The amount of kerosene used by a typical household in a week (Q, in litres) is found to have a strong correlation with the price of kerosene (P, in $). For 6 observations, the following...

Extracted text: Question 2. The amount of kerosene used by a typical household in a week (Q, in litres) is found to have a strong correlation with the price of kerosene (P, in $). For 6 observations, the following data was collected: Q P 11.4 4.00 14 3.50 16 3.00 18 2.50 20 2.00 22 1.50 (d) Calculate the price elasticity of demand for kerosene at a price of $3.75 (e) Using a further calculation, discuss how well the regression equation fits the data. (f) Discuss whether the relationship between the price and quantity could be due to the income effect, the substitution effect, or both.